Growth in Japan is about to take an almighty tumble. GDP is expected to have shrunk by more than 7% between April and June. That'll virtually wipe out a similar rise in growth in the first three months. It's all largely down to a a hike in sales tax from 5 to 8%, which came in in April.That was a "necessary evil", according to Saxo Bank's Head of Macro Strategy, Mads Koefoed. However, on an annual basis it means that Japan, the world's third biggest economy, will be broadly flat. What Japan's economy is really crying out for, he says, is major structural reforms and there's no sign of any major breakthrough there. Industrial output data is looking particularly weak. 
Mads says there are worries that the lower JPY level we saw last year and into 2014 hasn't translated into greater export strength. Given that interest rates are due to rise in the States, there's every possibility USDJPY will continue to rise, says Mads.